The Creator Economy: Why brands must adopt a creator-led strategy to stay relevant

Working in the world of communications every day, I don’t often have time to reflect on the pace at which things change in social media. Whether it’s an algorithm update, AI-driven tools or new platforms like Threads and Bluesky. However, it occurred to me last week just how influential creators had become when my 9-year-old son asked for the latest Nerf gun because Paxton from the Ninja Kidz was using one. Who? I hear you ask… exactly my point. There are estimated to be over 50 million content creators globally, influencing and tapping into people of all ages and interests.

What is the creator economy?

The creator economy is the ecosystem in which independent creators monetise their work on social media through audience engagement, brand partnerships, ad revenue, and subscription models. Taking off in the early days of YouTube, the industry took off at unprecedented speed during the pandemic. Staying at home not only created many more hours to consume content but opened up the space for more people to start creating it, too. Today, the industry is predicted to be worth $480 billion by 2027.

We live in a fast-changing digital world where creator-led content has disrupted traditional media channels. Younger generations, in particular Gen Z, turn to TikTok and Instagram as their go-to for discovering everything from food and drink to beauty and DIY tips. Take TikTok, for example; originally designed as a short-form video platform for creators, it is now the most-used search engine by Gen-Z and it’s results will always prioritise posts from creators over brands. In April 2024, Instagram followed suit with a major algorithm change that shifted the focus from big brands to individual creators, giving them more visibility in the discovery feed. As a result, competition for space increased, leaving brands struggling to achieve the same reach and engagement as in the early days of the platform.

The power of creators over brands

The widespread adoption of social media and creator-style content, not to mention our rapidly decreasing attention spans, has led to a significant shift in consumer behaviour. We crave authenticity, connection, and community more now than ever. Social media consumption is changing, with the average user sharing less and less to their public feed whilst private communities are growing. As people choose to connect with real people over brands, marketers need to meet consumers where they’re at, and creators are at the heart of this move.

So as the balance shifts towards creator-led content, brands face a choice. Adapt their social media strategy or risk falling behind.

So, how can brands adopt a creator-led strategy?

Ninja Kidz aside, content creators come in many different forms. From short-form creators, to long-form vloggers, podcasters, UGC creators, streamers, the list goes on. As a brand, choosing the right creators to work with can depend on many factors. At Houston, paid influencers who create short-form content have been the cornerstone of many B2C and B2B campaigns over the last 5 years, proving to be highly effective at driving reach and engaging new audiences. Our recent collaboration between our client Harris and DIY influencer Scott Baggaley did just that. Successfully targeting a younger demographic for Harris, his content surpassed 3M views across Instagram and TikTok.

Perhaps less well-known and understood is the UGC creator model. A UGC creator is someone who produces content for a brand. However, the key difference is that the content is owned and used on the brand’s own channel rather than the creator’s. The creator doesn’t need to rely on a large following of their own for the brand to tap into. The value for the brand is that the content is authentic and highly relatable, which tends to cut through and resonate with audiences more, leading to higher engagement and conversions. All at a fraction of the cost of partnering with a big influencer.

In a recent consumer campaign, Houston tested both branded and UGC creative in a TikTok ad campaign. After measuring how each performed, we switched off the branded creative entirely as it underperformed so significantly compared to the UGC creative, which delivered a much higher and more cost effective click-through rate.

Complementing influencer activity with a robust UGC creator strategy is a well-rounded approach that’s hard to beat for most brands. It can tackle the common issue of consumer ad fatigue while also helping to build trust and loyalty within creator communities.

The future of the creator economy

So, what’s next? Creators will continue to become more influential; many are already diversifying and expanding their channels beyond social media into platforms with TV shows, podcasts and more. It’s also becoming more commonplace for influential creators to have a seat at the table with the brands they hero, to input and drive creative direction and strategy.

The impact of AI generated content is another conversation entirely – but an important one. The ease and accessibility of AI content tools will only attract more creators and more content. Over-saturation will lead to quantity over quality in many online spaces, risking the authenticity we have come to value from creator-led content.

Houston is here to help brands navigate the future and succeed in the creator economy. Get in touch if you’d like to chat about how to adopt a creator-led strategy.